Columbia leaders propose special election for internet sales tax

Proposition One was in the early stages and would add a 2% internet sales tax in Columbia. (Mark Slavit/KRCG 13)

Columbia city council members considered a special election for a new internet sales tax proposal.

The new online tax would need more than voter approval.

Columbia city leaders said they were losing more $10 million a year in sales taxes because of internet shoppers who do not pay any Columbia city sales taxes. Proposition One was in the early stages and would add a 2 percent internet sales tax in Columbia. Some city council members wanted the proposal on the November 7 ballot in a special election even though state and federal laws needed changing before city leaders could collect internet sales taxes.

“The federal legislation has been discussed for many years in Congress," Columbia City Councilman Ian Thomas said. "A bill called the Marketplace Fairness Act has been discussed in committee. It hasn’t made it to a vote yet.”

Thomas said Proposition One would also help Columbia small business owners compete with the internet.

Ruth LaHue has owned and operated My Secret Garden and said a Columbia internet sales tax would create fair competition between local and online businesses.

“We try to compete with our website," LaHue said. "It’s just very, very difficult for a small business to compete with the internet.”

City leaders said a 2 percent internet sales tax would likely generate an extra $100,000 a year for their city budget. City leaders said they were working with federal and state lawmakers to create legislation that allows internet sales tax collections.

Boone County commissioners were also considering a use tax proposal for internet and out of state purchases.

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